Royal Phone-Hoax Death Prompts Cancellation of Sydney Radio Show

Southern Cross Media Group Chief Executive Officer Rhys Holleran said the company has decided the radio show won’t go ahead “into the future and will be reviewed” and “remains committed to any investigation.” Photographer: William West/AFP/Getty Images

Dec. 10 (Bloomberg) -- The Australian radio station that
made a hoax call to a London hospital about the Duchess of
Cambridge said it’s canceling the show and will cooperate with
authorities after a nurse who answered the phone was found dead.

“The radio show won’t go ahead into the future,” Rhys
Holleran, chief executive officer of Southern Cross Media Group
Ltd., which owns the 2Day FM station, said in a video message on
its website. The Hot 30 show, which broadcast the segment, has
been terminated, while prank calls have been banned across the
company and advertising suspended on the station, Southern Cross
said in a regulatory statement today.

Southern Cross plunged the most in about 15 months in
Sydney trading today. Two presenters from 2Day FM impersonating
Queen Elizabeth II and Prince Charles phoned London’s King
Edward VII hospital last week seeking details about the health
of Kate Middleton after she was admitted for acute morning
sickness. The nurse who took the call, Jacintha Saldanha, was
found dead Dec. 7.

“The death is being treated as unexplained,” the
Metropolitan Police said in a statement on their website,
updated Dec. 8.

Telstra Corp., the country’s biggest phone company, and
Wesfarmers Ltd.’s Coles supermarket chain cut advertising on the
station amid worldwide debate about the incident. A post about
it on the station’s Facebook page attracted almost 26,000
comments and an online petition calling for the presenters to be
sacked had signatures from Toronto to Cyprus.

“These young DJs are trying harder and harder, and the
marketplace has become very competitive,” Mark McDonnell, an
analyst at BBY Ltd. in Sydney, said by phone. “There’s
relentless pressure on coming up with something that will be new
and fresh and topical.”

Audience Share

The DJs, Mel Greig and Michael Christian, never expected to
be put through, according to e-mailed quotes from an interview
to be broadcast tonight on Nine Entertainment Co.’s “A Current
Affair.”

“There’s not a minute that goes by where we don’t think
about her family and what they must be going through,” Greig
said, according to the transcript. “The thought we may have
played a part in that is gutwrenching.”

Southern Cross dropped 5.9 percent to A$1.04 at the close
in Sydney trading. That was the largest decline for the stock
since Sept. 12 last year.

“Company protocols were adhered to” in the broadcast of
the item, Southern Cross said in its statement. The production
team made unsuccessful attempts for discussions with the
hospital regarding the program, and the company’s lawyers
reviewed the item before broadcast, it said.

“The company does not consider that the broadcast of the
segment has breached any relevant law, regulation, or code,”
Southern Cross said.

Largest Audience

2Day FM, which has the largest share of audiences between
ages 25 and 39 years in Sydney, has twice been censured by the
Australian Communications and Media Authority over incidents
involving Kyle Sandilands, a presenter on another show. The
first was after he interviewed a 14-year-old girl who said she
had been raped and the second was after he insulted a female
journalist on air.

“When these sorts of incidents start becoming repetitive
the regulators no longer look at it as an isolated case,” BBY’s
McDonnell said. The hoax call may prompt the regulator to
examine whether the station’s culture needs to be overhauled, he
said.

The ACMA is “engaging with the licensee” for 2Day FM
about the “facts and issues surrounding the prank call,” the
regulator said in a statement on its website.

‘Incredibly Distraught’

The board of Southern Cross met yesterday to consider what
action to take. The two radio presenters are “incredibly
distraught” and have been asked not to comment at this stage,
Holleran said in the web statement.

New South Wales police have received a request for
assistance from London’s Metropolitan Police Service, Deputy
Commissioner Nick Kaldas said on Sky News yesterday.

“It hasn’t been indicated to us that an offense has
occurred and they have not actually asked for anything yet,”
Kaldas said. “They’ve simply touched base, let us know of their
interest and they will get back to us if they actually want
something done.”

Lord Glenarthur, chairman of King Edward VII hospital,
wrote to the radio network describing the phone call as “truly
appalling” and “extremely foolish,” British Broadcasting
Corp. said Dec. 8. He wrote to the network a day after Saldanha
was discovered, having apparently killed herself, according to
the BBC.

‘Deeply Saddened’

The Duke and Duchess of Cambridge are “deeply saddened”
by the death, St. James’s Palace said in a statement on Dec. 7,
a day after the duchess left the hospital. Prince William
canceled his attendance at the British Military Tournament
yesterday to spend time with the duchess, the palace said in a
separate statement.

Saldanha will be buried in India, the BBC reported, citing
a statement from her husband Ben Barboza on his Facebook page.

Australia’s government is considering the findings of a
report into the country’s print media, an inquiry made in
response to allegations of phone hacking at News Corp.’s News of
the World newspaper in the U.K. Measures to deal with invasion
of privacy “need improvement,” the report concluded.

Invasions of privacy might sometimes be justified if they
were “puncturing the pomposity of powerful people,” David
Vaile, vice-chairman of the Australian Privacy Foundation, said
by phone.

‘Powerless Individuals’

“Doing pranks that involve compromising essentially
powerless individuals in the pursuit of ratings, I’m less
sympathetic to that,” he said.

Still, any effects on Southern Cross from the hoax call are
likely to be short term as regulators would deliver no more than
a “slap over the wrists” and advertisers would probably
return, BBY’s McDonnell said.

2Day FM presenter Sandilands’s most recent censure, when he
insulted a female journalist, “had a minor effect on revenues
in H1 and is expected to be immaterial in H2,” Holleran said in
a February presentation.

Macquarie Radio Network Ltd. fell 6.3 percent on Oct. 2 to
its lowest in four and a half months after companies pulled
advertising over remarks presenter Alan Jones made disparaging
Prime Minister Julia Gillard. After dropping for a second day,
the stock regained its previous level the following week,
according to data compiled by Bloomberg.

The incident would reduce profit by between A$1 million ($1
million) and A$1.5 million in the first half and have “minimal
if any” impact on the company’s second half, Tate said, without
specifying which measure of profit he was referring to.
Macquarie Radio recorded operating profit of A$7.5 million in
the six months through December 2011.